not oblige readers, in the committee’s report on its data, with the proportional implications of these facts, but a piece of scrap paper and a .No. 21/2 pencil is all the equipment that is necessary to remedy this oversight. Houston’s family in poverty at $3,500 a year pays 9.6% of its total income in state and local taxes. Houston’s family in plenty at $25,000 pays 3.3%. Houston’s family in luxury at $50,000 pays 2.5%. That is, data presented to the public as valid by researchers paid by major Texas corporations shows that people in poverty in Houston pay almost four times as large a part of their income in state and local taxes as people living in luxury in Houston. The District of Columbia research makes it clear why the statistical facts are so obvious, whichever “side” prepares them. TAXES IN nine of the 25 largest cities, the D.C. study showed, are progressive \(meaning “that there is a higher percent burden applied to families earning These cities are Baltimore, Boston, Denver, Los Angeles, Milwaukee, New York, San Diego, San Francisco and Washington. “All these cities with progressive major tax structures are in states with individual income taxes,” the study says. “.. . with the exception of Boston, all the progressive structures include a finely graduated state income tax. . . . “Groceries are either exempt from sales taxation or a credit is allowed on the income tax for sales taxes paid on groceries in all these cities with progressive tax structures.” Texas has a third of the nine major U.S. cities, among the largest 25, that have regressive tax burdens. The other six are Columbus, Cleveland, Memphis, New Orleans, Pittsburgh and Seattle. What causes this penalizing of poverty? The D.C. study says: “The regressiveness in these cities is primarily caused by the lack of state income taxes and the presence generally of broad sales and use taxes at comparatively high rates. Only in one of these cities, New Orleans, is there a state income . tax, and the Louisiana tax is very low. Local payroll taxes are levied in Cleveland, Columbus and Pittsburgh. The average sales tax in these nine cities of 4.75% exceeds the average in all 25 cities. Only in Pittsburgh is there a relatively high property tax burden.” The shapes of the pattern are specifically visible in Tables I and II. The pattern is also manifest on the face of the Texas tax picture. As the Tax Foundation, Inc., \(whose trustees come entirely from the U.S. financial establishment, along with Sen. Byrd, Jr., of. Virginia and Raymond Moley of specifies in a. 1970 periodical, 54% of Texas’ state tax collections come from sales, use, and selective sales taxes. 1 When one considers the gross fact that the rest of the state’s tax collections are in substantial part passed on to workers or consumers by corporations, one can see that the social unfairness of the state’s not having a progressive personal income tax is understated, not overstated, by the 54% figure. THE ALMOST self-evident case for the personal income tax in TeXas has been made, quite dispassionately, by Carey Thompson, professor of economics at the University of Texas. He points out that for the very broadest, general taxes, there can be only three bases wealth, sales and income. In Texas, property taxes are used heavily for local revenue. Sales taxes are heavily used. The income tax is not used at all. Thompson states that there is no measure of tax fairness which everyone accepts, but there is “a rough consensus,” \(no exact expression of which is likely to tax is levied according to economic well-being, with those who have a greater Contributing at a higher rate. 2 He presented this same insight from another direction in an article in the Texas Law Review. “Among those who study public finance,” he wrote, “there is a general, if not universal, agreement that a tax on net personal income is fundamentally the best tax method which can be employed in financing modern government.” He said that most authorities agree that it is “the most rational and scientific of all our tax instruments.” This is quite a lot to claim, and Thompson, understanding this, continued: “.. . income provides the most satisfactory measure of economic well-being or ‘ability to pay,’ and economic well-being, in turn, is widely accepted as the best single criterion by which the tax burden may be distributed among taxpayers .. . “The use of an income tax, furthermore, permits adjustment of the tax base in some degree to ; the individual circumstances of the taxpayer. . . . Taxes on sales, commodities, realty and the like are much less readily adjusted to . . . varying personal EDITOR Kaye Northcott CO-EDITOR Molly Ivins EDITORS AT LARGE Elroy Bode, Ronnie Dugger, Bill Hamilton Contributing Editors: Winston Bode, Bill Brammer, Gary Cartwright, Lee Clark, Joe Frantz, Larry Goodwyn, Harris Green, Bill Helmer, Dave Hickey, Franklin Jones, Lyman Jones, Larry L. King, Georgia Earnest Klipple, Larry Lee, Dave McNeely, Al Melinger, Robert L. Montgomery, Willie Morris, Bill Porterfield, Jamei Presley, Charles Ramsdell, Buck Ramsey, John Rogers, Mary Beth Rogers, Roger Shattuck, Edwin Shrake, Dan StraWn, John P. Sullivan, Tom Sutherland, Charles Alan Wright. We will serve no group or party but will hew hard to the truth as we find it and the right as we see it. We are dedicated to the whole truth, to human values above all interests, to the rights of man as the foundation of democracy; we will take orders from none but our own conscience, and never will we overlook or misrepresent the truth to serve the interests of the powerful or cater to the ignoble in the human spirit. The editor has exclusive control over the editorial policies and contents of the Observer. None of the other people who are associated with the enterprise shares this responsibility with her. Writers are responsible for their own work, but not for anything they have not themselves written, and in publishing them the editor does not necessarily imply that she agrees with them, because this is a journal of free voices. THE TEXAS OBSERVER 6The Texas Observer Publishing Co. 1971 Ronnie Dugger, Publisher A window to the South A journal of free voices Vol. LXIII, No. 2 Jan. 29, 1971 Incorporating the State Observer and the East Texas Democrat, which in turn incorporated the Austin ForumAdvocate. Editorial and Business Offices: The Texas Observer, 504 West 24th St., Austin, Texas 78705. Telephone 477-0746. ‘700:810,'”iff GENEjtAL MANAGER C. R. Olofson OFFICE MANAGER Irene Wilkinson EMERITUS BUSINESS MANAGER Sarah Payne The Observer is published by Texas Observer Publishing Co., biweekly from Austin, Texas. Entered as second-class matter April 26, 1937, at the Post Office at Austin, Texas, under the Act of March 3, 1879. Second class postage paid at Austin, Texas. Single copy, 25c. One year, $7.00; two years, $13.00; three years, $18.00; plus, for Texas addresses, 4’4% sales tax. Foreign, except APO/FPO, 50c additional per year. Airmail, bulk orders, and group rates on request. Change of Address: Please give ,old and new address, including zip codes, and allow two weeks. Form 3579 regarding undelivered copies: Send to Texas Observer, 504 W. 24th, Austin, Texas 78705.
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